July 31, 2020 / 7:34 PM / 9 days ago

CANADA FX DEBT-C$ ends July higher to notch best win streak in six years

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar gains 0.3% against the greenback
    * For the month, the loonie is up 1.5%
    * Canadian GDP rises 4.5% in May
    * Canadian bond yields rise across the curve

    By Fergal Smith
    TORONTO, July 31 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Friday to notch its
fourth straight monthly gain, its longest winning run in six
years, as domestic data showed the economy expanded more than
expected in May.
    The gain for the loonie on Friday follows a decline in
recent days. As the end of the month approaches, some market
players tend to rebalance their currency hedges.
    "As the month-end passed in London for the big global
investors ... then I think the market said upward pressure in
USD-CAD is off, back to where we were, which is down below
1.34," said Greg Anderson, global head of foreign exchange
strategy at BMO Capital Markets. "I think we'll see more of that
next week."
    The loonie has benefited in July from a weakening of the
U.S. dollar, as coronavirus cases climbed in the United States,
and from higher prices for oil, one of Canada's major exports.
    On Friday, the loonie        was trading 0.3% higher at
1.3377 to the greenback, or 74.76 U.S. cents, taking its gain
for the month to 1.5%. The monthly winning streak, which
followed a sharp decline in March when financial markets were
pummeled by the coronavirus crisis, was the currency's longest
since 2014.
    Canadian gross domestic product rose by 4.5% in May, and a
preliminary flash estimate sees a further 5% increase in June as
the economy reopens following COVID-19 lockdowns, Statistics
Canada said. Economists had expected a 3.5% gain for May GDP.
                
    U.S. crude oil futures        settled 0.9% higher at $40.27
a barrel, benefiting from news that U.S. oil output cuts in May
were the largest on record.             
    Canadian government bond yields were higher across the
curve, with the 10-year yield             up 2.1 basis points at
0.468%. 
    Canadian financial markets will be closed on Monday for a
civic holiday.

 (Reporting by Fergal Smith; editing by Jonathan Oatis and Kevin
Liffey)
  
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